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Tax on drawdown question

Tax on drawdown question

Old May 4th 2021, 7:06 pm
  #46  
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Default Re: Tax on drawdown question

Originally Posted by Joppa
For non-earned income, you get personal allowance of 5,550 euro and 6,700 euro if aged 65 or over. Tax rate is 19% on first 12,450 euro and 24% on next chunk up to 20,200 euro. So assuming you are under 65, £12,000 is 13,860 euro, you pay 19% on 13,860 - 5,550 = 8,310 euro or 1578. 90 euro or around £1,367.
Shocking....
Thanks Joppa 😊
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Old May 4th 2021, 8:57 pm
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Default Re: Tax on drawdown question

Those figures are incorrect. You get a personal allowance of 6700 if over 65 and 8100 if over 75 plus everyone gets another 2000 general allowance, and if you have a low income, you get another sliding scale allowance of 3700 reducing to zero when your income exceeds 14450.
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Old May 4th 2021, 9:01 pm
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Default Re: Tax on drawdown question

Originally Posted by Fred James
Those figures are incorrect. You get a personal allowance of 6700 if over 65 and 8100 if over 75 plus everyone gets another 2000 general allowance, and if you have a low income, you get another sliding scale allowance of 3700 reducing to zero when your income exceeds 14450.
Surely those allowances other than the personal are for earned income including pensions, and don't apply to rental income?
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Old May 5th 2021, 5:40 am
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Default Re: Tax on drawdown question

Originally Posted by Fred James
Those figures are incorrect. You get a personal allowance of 6700 if over 65 and 8100 if over 75 plus everyone gets another 2000 general allowance, and if you have a low income, you get another sliding scale allowance of 3700 reducing to zero when your income exceeds 14450.
Thanks Fred.
So, if you don't mind me asking.
What would I pay in taxes in Spain, seeing that my only income would be the £12k rental income and I'm 54?
All of this is worrying me now....
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Old May 5th 2021, 7:15 am
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Default Re: Tax on drawdown question

Originally Posted by Joppa
Surely those allowances other than the personal are for earned income including pensions, and don't apply to rental income?
Yes, I was forgetting that his only income was from rental properties - a pretty unusual situation as it is rare for someone to have no other income.


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Old May 5th 2021, 9:05 am
  #51  
 
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Default Re: Tax on drawdown question

Originally Posted by Alfonsocolli
Thanks Fred.

What would I pay in taxes in Spain, seeing that my only income would be the £12k rental income and I'm 54?
.
If you are letting the property as a long term residential let, you only pay tax on 40% of the net rental. Also you get some generous expenses deductions.

So, you will probably pay no tax in Spain on the rental income as the net income will be less than your allowances.
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Old May 5th 2021, 12:35 pm
  #52  
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Default Re: Tax on drawdown question

Originally Posted by Fred James
If you are letting the property as a long term residential let, you only pay tax on 40% of the net rental. Also you get some generous expenses deductions.

So, you will probably pay no tax in Spain on the rental income as the net income will be less than your allowances.
You guys have all been very helpful, I will definitely buy you all a beer in Spain soon!

Does anyone have an accountant or tax expert in Spain that they can recommend please?
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Old May 5th 2021, 12:55 pm
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Default Re: Tax on drawdown question

Originally Posted by Fred James
If you are letting the property as a long term residential let, you only pay tax on 40% of the net rental. Also you get some generous expenses deductions.

So, you will probably pay no tax in Spain on the rental income as the net income will be less than your allowances.
Does is work with rentals in UK and not just in Spain?
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Old May 5th 2021, 2:29 pm
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Default Re: Tax on drawdown question

As far as I kow it applies to any property, just like the second home imputed rental income tax applies to second homes in the UK.
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Old May 5th 2021, 2:33 pm
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Default Re: Tax on drawdown question

Post Brexit, as a third country national I think you now pay tax on the gross rental income rather than net income after expenses which was previously the case.
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Old May 5th 2021, 2:37 pm
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Default Re: Tax on drawdown question

Do you have a source for that information? As I said, as far as I know the rule still applies but it would be good to know what the exact post Brexit rules are.
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Old May 5th 2021, 2:44 pm
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Default Re: Tax on drawdown question

I have just checked with the latest info from the Blevins Franks tax guide and it says

A reduction of 60% is available against net rental income for residents of Spain before tax is payable (only available for long-term lettings). This also includes lettings income from outside Spain. Additionally, some expenses can be deducted from the gross rental income, but not all of them.
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Old May 6th 2021, 11:02 am
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Default Re: Tax on drawdown question

Hi Fred and LynnR,
Using "Taxleak" entering €22,500, over 65 and retired, this is the result do you think this is accurate?
Also where do I add the Social Security total of €1,428.75? as it would have to be taxed and not payable as not employed.
Social Security (6.35 %)


€1,428.75

Total Deductions

€4,406.79

Net Annual Salary

€18,093.21

Net Monthly Salary

€1,507.77

Net Weekly Salary

€376.94
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Old May 7th 2021, 5:14 pm
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Default Re: Tax on drawdown question

Originally Posted by Fred James
Do you have a source for that information? As I said, as far as I know the rule still applies but it would be good to know what the exact post Brexit rules are.
My mistake, the post Brexit change only applies to UK residents receiving rental income from a property in Spain, in this case the tax increases from 19% to 24% and is applied to gross income. The ops situation sounds to be the reverse of this - resident in Spain receiving rental income from the uk so no change.
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Old Jun 21st 2021, 4:59 am
  #60  
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Default Re: Tax on drawdown question

Originally Posted by Keithtoon
Hi all,
Just thinking of different options:
With a £200,000 Pension fund...what is the best way to go, Drawdown or Annuity?
Regards and thank you.
Keith
You need to take independent financial advice, which unfortunately does not come cheap, first meeting/call usually free if you use the IFA company for your pension, rest of fees are usually a percentage of the available fund, followed by ongoing annual charges by both the IFA and pension company. From exerience, growth of the fund is currently greater than my charges and withdrawals.

Annuity rates are particularly low at the moment, and drawdown is much more flexible. The other advantage of drawdown over annuity is that when you die the fund is still available in your estate.

Please n ote that I am NOT a finacial adviser and this does not constitute financial advice.

I would strongly suggest that you at least make enquiries. Currently in the UK, if you wish to move from one type to another and the pot is greater than £30,000 then it is a legal requirement to take independent financial advice.
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